Automation is set to eliminate low-value BPO in two years

NYSE-listed Synnex Corporation recently acquired Bengaluru-based BPO firm Minacs for $420 million (over Rs 2,850 crore).The $13-billion Fortune 500 company will integrate Minacs with its BPO businessConcentrix, adding $400 million to the latter's revenue of $1.4 billion. The combined revenue brings the entity close to TCS BPO's $2 billion; Genpact is the leader in the space with $2.5 billion. The new Concentrix will have more than 90,000 staff providing services in over 40 languages from 125 delivery centres across 6 continents. Chris Caldwell, president of Concentrix, spoke exclusively with TOI recently. Excerpts:

How does the Minacs' acquisition tie into Concentrix's overall strategy?

We at Concentrix service the automobile protocol and Minacs has very strong automobile expertise and they service lots of clients in the automotive sector and do lots of services in the automotive sector. So we are very synergistic. Also, Minacs has spent a lot of time developing disruptive technology around marketing optimization, telematics and the internet of things (IoT). A lot of people talk about IoT. But we get a lot of clients who come to us who simply don't know how to manage all the data generated from them and also don't know how to make that data meaningful. Minacs has developed a technology platform that allows them to aggregate the data, do analytics on the data and then drive triggering events for an opportunity to increase customer service levels, or increase opportunities for customers to find more products, accessories and clients.

BPO has shown signs of wear. Concentrix has an ambitious revenue and margin outlook for the 2017 financial year. How close are you to achieving this target?

We have been driving automation on our client side for a number of years and that drives higher margins for us because it delinks the labour to revenue model, which is the traditional BPO. Part of our margin expansion is the technology platform that we have invested in and built.With the Minacs acquisition, we are getting additional technology platforms that will drive a higher margin profile. The third thing that we have seen and continue to see in margin expansion is around digital work, where it's more than voice and more than just non-voice, a 360 degree experience for our customers. We are very focused on not doing low-value BPO work because we see that being completely eradicated by automation and everything else over the next couple of years.

Concentrix did $1.41 billion in revenue in the 2015 fiscal. But in the last twelve months, the needle has barely moved. Why?

When we purchased the IBM business two years ago (Synnex bought IBM's customer care BPO services business for $505 million), there was one specific large contract for government agency that was ending this year. Our move to higher-value businesses - digital, automation, analytics - also cannibalized our older revenue streams.But frankly , we thought it was the right thing to do because we won more share within the clients and the margins improved within those client accounts.

Will you retain the brand name Minacs?

The Minacs brand name will go away . On November 1, we're rebranding the organization as Concentrix. Key leaders from Minacs are joining my direct team and we see quite a smooth integration of the leadership team.Anil Bhalla, chief executive officer of Minacs, will continue to be with Concentrix, but his area of responsibility will be telematics and marketing and he will directly report to me. His new title and designation has not been announced yet.